Business

Fed may raise rates over uncertainty in US economic programmes

WASHINGTON: Federal Reserve policymakers said it may be appropriate to raise interest rates again "fairly soon" should jobs and inflation data come in line with expectations, according to the minutes of the Fed's last policy meeting released on Wednesday.

The minutes of the 31 Jan to 1 Feb discussion, during which the US central bank voted to keep rates unchanged, also showed the depth of uncertainty at the Fed due to a lack of clarity on the new Trump administration's economic programme.

Last week, Fed Chair Janet Yellen said waiting too long to raise rates again would be "unwise" and gave a strong indication that the central bank remains on track to consider raising rates again by the summer.

Prices of US stocks fell marginally following the publication of the minutes and yields on US government debt also dropped.

Expectations on when the Fed will next raise rates were little changed, with investors predicting May at the earliest.

In December, the Fed forecast raising rates thrice in 2017 and so far, robust readings on the economy have bolstered the confidence of policymakers. Set against that is the uncertainty over Mr Trump's economic plans, with policymakers waiting to assess how policies would affect the economic outlook. - REUTERS

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